Gazundering: What can I do about it?

If you're selling your home and a buyer lowers their offer at the last minute, chances are, you've been gazundered. But what actually is gazundering - and is there anything sellers can do about it? And, if you're a buyer, is it right to even consider the tactic?

What is gazundering?

Gazundering is when a buyer suddenly reduces their offer on a property after previously agreeing with the seller to a higher one. Oftentimes, it forces sellers to agree to a lower-than-expected purchase price or else look elsewhere for potential buyers.

Some buyers have been known to seek a price reduction of up to 20% - and making the demand on the very day that contracts are to be exchanged.

What’s the difference between gazundering and gazumping?

It’s important to differentiate gazundering from its property market cousin, ‘gazumping’.

• Gazumping is when a seller breaks a verbal agreement on a sale because they’ve accepted a higher offer from someone else. For more on gazumping, read our blog on what to do if it happens to you.

The difference is:

• Gazundering flips the power dynamic, often occurring in buyers’ markets, where buyers feel confident that they can extract concessions from the seller for a lower price.

A 2018 government survey found that both gazumping and gazundering were equally significant issues in Britain’s real estate market.

Is gazundering legal?

Yes, gazundering is perfectly legal and buyers have a right to engage in it as long as no contracts have been signed. Both gazundering and gazumping are legal in the UK.

Gazundering is more common in England, Northern Ireland, and Wales than in Scotland, where transactions become legally binding earlier in the process.

Is gazundering fair and ethical?

It's a complicated question to which there’s no easy answer.

It probably depends on which side of the gazunder you stand: it may feel frustrating as a homeseller if it happens to you. But if you’re a buyer, it feels reassuring to know you have an extra bargaining tool in the bag.

Gazundering is on the minds of many people in the property market. According to a 2019 report, 45% of people surveyed expressed concern about gazundering, with that figure rising to 50% in the South of England, London, and West Midlands.

Why do buyers gazunder?

Buyers who gazunder usually do so because they realise they’re suddenly in a much stronger position than at the start of their search for a home.

For instance, the seller may have already taken the home off the market because a verbal agreement has been reached with the buyer. This can, inadvertently, put them in a position that's susceptible to tactics like gazundering. They often part of a chain themselves, so they may have little flexibility.

In other cases, the buyer's solicitor may learn new information about the property (like a flooded garden, or a leaky roof) and will tell the buyer to lower their verbal offer. Or if the market is volatile, they could learn that property prices have plummeted in the time since they made the original offer.

In some situations, the buyer may feel forced into lowering their original offer because they’re part of a property chain as well, and the offer on their sales property has been reduced. If the seller accepts the revised offer, it’s usually to prevent the chain from breaking.

As a seller, how can I avoid gazundering happening to me?

A seller can take certain steps to reduce, though not eliminate entirely, the chances that their sales price is reduced.

1. Pick good estate agents

Find an estate agent who is adept at navigating the selling process. Specifically, an experienced agent should have a knack for weeding out the genuine buyers from the punters.

2. Avoid chain-buyers

If you’re lucky enough to have several offers, you could also decide to accept an offer from a chain-free buyer or a cash buyer. Want to know more? Read our blog: ‘What’s the best way to manage a property chain?’

3. Set a realistic asking price

Some buyers may initially make an offer on a property in order to secure it, only to reserve their right to lower that offer later. But if you’ve priced your property fairly, there'll be less chance of the buyer lowering their offer at the last minute to extract last-minute reductions. See how much your house is worth here to get a good idea of the asking price to set.

4. Move quickly

The less time there is from the moment you’ve made a verbal agreement to when contracts are exchanged, the less likely the buyer will change their mind.

5. Be honest

Don’t try to hide some flaw about your property that will only be revealed anyway because that could give the buyer the excuse they’re looking for to gazunder.

As a buyer, how can I gazunder successfully?

On the other hand, buyers can take steps to maximise the chances for a successful gazunder. You should:

1. Ensure that the seller is part of a property chain

If the buyer is also in the middle of purchasing a home, they may need whatever you’re offering them, regardless of whether it’s less than they had planned.

2. Make an appropriate offer

Calibrate your new offer (your ‘gazunder’) so that the buyer won’t just walk away rather than settle for a figure that is just too low. Offer a fair price that the buyer will still feel comfortable accepting. If you need any help, our guide to making an offer on a house is a good place to start.

Is it ever okay to gazunder?

If you’re contemplating gazundering but feel that it may be just a little unethical, then it’s worth knowing that there are certain circumstances in which gazundering can be legitimate.

Some instances in which gazundering is seen as less objectionable include:

• Post-survey: Perhaps your surveyor’s homebuyers’ report has revealed some unexpected issues that affect the market value of the property. For more on this, check out our report ‘How house survey problems can affect your home sale’.
• Financial problems: Maybe you’ve had a change in circumstances - job loss, salary decrease, or other unforeseen financial hit - and you just can’t afford the original offer you made. To save money, gazundering may feel worth the potential fall-out.
• Sudden market crashes: The housing market doesn’t usually plummet overnight, so it’s rare to be taken completely by surprise. Still, it’s worth keeping an eye on the market as you approach the day of contract exchange. It could impact how much your mortgage lender is willing to give you.

Ultimately, gazundering can either offer an opportunity to take advantage of when buying a home, or a challenge to overcome when selling a property.

Summary: Sneaky tactic or fair game?

We've gone over the basics of gazundering. For some, especially homesellers, it's a sneaky tactic. But for others, it may be considered fair game.

In fact, despite its notoriety, there are some examples where gazundering is definitely worth considering. For example, if you're a buyer and your surveys uncover problems with the property, or the market crashes. In such cases, gazundering isn't a matter of morals - it's a matter of self-preservation.